How to Select Six Sigma Projects?

Selecting Six Sigma Projects?

Focusing effort and resources to deliver maximum benefits to the organisation

Choosing the right six sigma projects is key to the success of an organization in terms of delivery of business objectives, business plan strategies and development opportunities for the workforce.

However, there is a cost associated to running six sigma projects that isn't always captured or even considered when an organization embarks on six sigma.

Choosing the right projects is crucial to the credibility of six sigma and its' ability to live within the bounds of its' own philosophies by being efficient and cost effective with the resources it employs.

Any organization embarking on a strategy that includes Six Sigma as it's methodology for improvement should ask itself one question, "What do I want to improve within my business".

This might seem like a straight forward question but for many businesses, the answer to this question can determine whether Six Sigma is going to be successful or fall by the wayside like some other improvement initiatives. To understand the requirement and deliverables for Six Sigma the organization should listen to TWO VOICES.

1) Voice of the Customer (VOC)

This is the more powerful of the two voices in question as customers are the reason why we are in business. Many projects are initiated as a response to a particular customer requirement or complaint.

2) Voice of the Business (VOB)

Although not as powerful as the Voice of The Customer, projects or initiatives that are initiated from within the business tend to start from either a need to improve efficiency, reduce cost or ultimately to respond to a historical customer requirement or problem.

Where both of these two voices meet is through the link to the direct outputs of the process. The outputs of any process are produced to satisfy a requirement. If the output is to an external customer then it should satisfy the Voice of the Customer. If the output is to an internal customer, then it should satisfy the Voice of the Business.

In understanding the requirements from these two voices, we have clear direction on the types of projects we should be delivering within the organization within which we work.

The vast majority of Six Sigma Projects, particularly when talking about

DMAIC Six Sigma projects will fall into one of the following three categories.

1) Cost Saving

Where the case for the project is focused around reducing bottom line costs within the business, that are directly attributable to Profit and Loss account cost indicators.

2) Efficiency Improvement

The case for this type of project is based around process improvement, linked to either cycle time improvement (achieved through the use of Lean Sigma tools and techniques) or reductions in process variation (achieved through the use of DMAIC six Sigma) which ultimately lead to increased right first time yield

3) Revenue / Sales Growth

The case for these projects is focused around significant shifts in sales growth based on improving product and service to the customer.

Any project selected should look to improve the performance of the process or processes under investigation against at least one of the above performance indicators. The ultimate test of a project is in its ability to deliver benefits in all 3 areas. Ensuring that the benefits achieved satisfy all 3 performance indicators will inevitably lead huge benefits for the organization.

Any sustainable six sigma initiative relies upon a steady flow of projects to Six Sigma Black Belts. A list of initial project ideas should be collected either from within the business, or from the senior management team to resolve particular business issues. These projects should then be reviewed against criteria set by the business to give a prioritised list of projects.

Project teams should be clearly tasked with a realistic benefits target at the outset of the project. This benefits target should look to satisfy or fulfill one or more specific business objectives and should be measurable against one or more of the performance indicators identified above. The reality of this benefits target can then be confirmed once data around the baseline performance has been obtained.

Selection of six sigma projects relies upon a clear understanding of the business objectives, a management team that supports the assignment of internal resources to deliver the projects, and more importantly than anything else, a clearly defined business case and benefits statement that details the objectives of the project in terms of deliverables.

Projects teams are a hidden cost to the business so it is vital that the solutions generated by these teams have real impact that is tangible and highly visible. The benefits achieved by these projects should more than cover the cost of any six sigma resources within the first year, with exponential increases in benefits over the forthcoming years.